Disposed to disposable: Why homes don’t last in the Land of the Rising Sun

Published on June 4th, 2014 | By: Jessica McMathis

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Much has been written about Japan’s “disposable home culture,” which impacts not only the value of housing, but also the environment. So why is it that the homes so quickly depreciate? The answer isn’t quite so simple.

But I need not own a home to understand this simple concept: If I’ve made faithful payments on anything—let alone a house—for 30 years only to be told my monthly monies were for naught, well, that’s enough to make even the most mild-mannered man or woman insane.

More recently, Koo participated in a Freakonomics podcast during which he more explicitly explained how a country quick to demolish, rather than retrofit, its homes is essentially undercutting the creation of wealth.

“So you tear down the building, you build another one, then you tear down the building, and you keep on building another one, you’re not building wealth on top of wealth,” says Koo in the podcast’s transcript. “It’s a very poor investment. Compared to Americans or Europeans, or even other Asian countries where people are building wealth on top of wealth because your house is a capital good. And if you do a certain amount of maintenance you can expect to sell the house at the higher price. But in the Japanese case, once you expect to sell it you expect to sell at a lower price 10 or 15 years later. And that’s no way to build an affluent society.”

Why would anyone expect—or accept—selling their home for less than what they paid, if anything at all?

Turns out, the answer isn’t so simple.

Given its temperate yet temperamental climate, as well as a propensity for serious natural disasters (typhoons, volcanoes, earthquakes, and tsunamis) and the fires that result from such acts of God, Japan has a definite need for building codes and structural standards.

“Once ridiculed as ‘rabbit hutches,’ Japanese homes would appear to have made substantial gains in terms of floor area,” the report’s authors write. “From a different perspective, however, this implies that homes built during the nation’s high-growth area, when quantity was more important than quality, are becoming increasingly obsolete by today’s standards. They are also significantly smaller than the typical home and no longer in tune with the needs of homebuyers. Consequently, they are either left vacant or torn down to make way for new homes.”

A home in Osaka shows some wear. Credit: m-louis; Flickr; CC BY-SA 2.0

This expectation found roots when the Japanese were forced to quickly rebuild after World War II, when many of its cities were quite literally leveled.

But according to Jiro Yoshida, assistant professor of business at Pennsylvania State University, even today buildings that are built to last aren’t given the chance. “The government updates the building code every 10 years due to the earthquake risk,” he says in a recent interview. “Rather than spending money on expensive retrofitting, people just build new homes.”

All that construction may be good for Japan’s economy, and an advantage for architects, but not-so-great for its homeowners or the environment.

Greener buildings will benefit more than just Japan’s environment. While the initial investment in green homes may be greater, so too may the long-term rewards.

Findings by Yoshida and co-author Ayako Sugiura, “The Effects of Multiple Green Factors on Condominium Prices” (DOI 10.1007/s11146-014-9462-3) published in The Journal of Real Estate Finance and Economics, indicate that “the initial green premium can be negative but becomes positive as the building ages if a green building has a higher life-cycle cost and a longer economic life.”

Whether or not Japanese homebuyers buy in to buying green—or steps toward a more sustainable housing culture stick—the country’s army of architects will stay busy, helping to create cat-friendly communes and build communities with smaller carbon footprints.